Teenagers becoming traders in high-end deals for sneakers

Youths haggle online, at exchanges for prized pairs of shoes

4/20/2014

BY GRANT GLICKSONNEW YORK TIMES

NEW YORK — With sneakers slung around their shoulders and pockets full of cash, young boys huddle in hotel ballrooms and high school gyms, shouting and bartering as though they belong on a trading-room floor.

“What do you want for them?” John Leonardo asked at one recent event in New Jersey.

“What’s your offer?” someone hollered back.

In a flurry of transactions, John, who is 13 years old, bought, sold, or exchanged 20 pairs of designer basketball sneakers and walked away with seven, four more pairs than he started with. His collection’s retail value climbed to $1,155 from $340.

John, an eighth-grade student from Manalapan, N.J., and thousands of other teen “sneakerheads” have formed a thriving subculture using Instagram, Facebook, and weekend conventions to spot, sell, and trade coveted, sometimes limited edition pairs of basketball shoes.

Teens who have grown up with eBay and the Internet have learned the art of trading up, sometimes earning a profit in the process.

Jake White, 14, of Freehold, N.J., has 81 pairs in his collection, helped a lot by gifts from his parents. He estimates they’ve spent $11,000 on shoes and probably could make $20,000 if he sold them all.

“I know just about everything about sneakers,” he said. “I only wear them in the summer because I don’t want to take down the value of them.”

While the lucrative retail business for sneakers — and the exclusive lines that attract overnight campers outside elite stores — have existed for decades now, this teen-filled marketplace — or high-end sneaker exchange — has spread from city to city in the last few years. It’s the latest phase of the sports footwear craze that began 30 years or so ago when the National Basketball Association forbade Michael Jordan, then a rookie, from wearing his Nike Air Jordan 1’s on the court because they didn’t meet the dress code.

To this day, no player’s line comes close to Nike’s Jordan-branded footwear, sales of which reached $2.5 billion last year. Overall, basketball-sneaker sales made up $4.5 billion of the total $21 billion athletic-shoe business, according to Princeton Retail Analysis.

And the teen traders at these conventions know the market, reciting resale values, the buzz of a hot trade, and the debut dates for new pairs as easily as others can spit out baseball stats.

Joseph Diorio, 34, the owner of SoleXChange, hosts and sponsors trading events in major cities such as New York and Miami and likens the sneaker-trading craze to the comic book business. “I think collecting sneakers will live on forever because there is a story behind every sneaker,” Mr. Diorio said.

At a convention he sponsored last month in the Hotel Pennsylvania in Manhattan, hundreds of students carted shoe boxes in duffel bags and backpacks into a 40,000-square-foot space. At many of these events, held nearly weekly nationwide, those who pay a $25 entry fee to enter as traders can lug in a maximum of five pairs to barter or sell and then generally earn between $300 and $800, depending on the venue.

To get display space like a real vendor, attendees can pay about $125 for a three-person table — and average $2,000 to $4,000 a day, with highs reaching nearly $20,000.

The mostly male, mostly teen hawkers at these conventions may have little in common but their envy for other collectors’ wares. They wander up and down aisles holding sneakers high on top of boxes carried aloft like pizza pies, or set up shop on the floor with a stacked tower of shoes on display.

And even though many of them aren’t old enough to drive, they have quickly learned the art of negotiating and have made friends they would never meet otherwise.

“These kids make 10 to 12 transactions and before you know it, they have a $2,000 pair of sneakers or a real nice collection of shoes,” said Suraj Kaufman, the owner of two popular Nike footwear stores in New Jersey called Sneaker Room. “It’s really amazing to see.”

At the smaller convention attended by John Leonardo and a few hundred teens, Nicole Cavallero, a language arts teacher at Pine Brook School in Manalapan and the mother of a 12-year-old trader, watched as shoes switched hands quickly.

“This scene is absolutely insane, but I know that this is all the rage,” she said, adding that she gave her son, Dominick, and one of his friends a lesson in bargaining on the way to an event. “As parents we need to encourage them not to be taken advantage of but also to get their money’s worth.”

“Reselling basketball sneakers has become a cultlike atmosphere,” said Marshal Cohen, chief industry analyst of the NPD Group. “No one is watching over all this money changing hands. So it seems like it’s being done underground, but it’s perfectly legal. And it’s exciting to them because it’s a real form of income.”

While money or shoes change hands on these Saturday afternoons, trades using Instagram and other social media have become so popular that a new shoe — ordered online with the purchase snapped via Instagram — may not have even arrived before it is resold by some enterprising youth.

Online and off, business is brisk.

“I can see sneakers becoming even bigger than the baseball-card scene,” predicted George Rahor, who teams with his son, Steven, 14, in “Street Heat Sole & Style Expo” events, and who used to run baseball-card shows in the 1990s.

Just like the aura around other highly prized collector’s items, sometimes it’s the deal that doesn’t get made that generates the most buzz.

At the Manhattan event last month, one young vendor turned away $98,000 in cash for his Nike Air Yeezy 2 “Red October” sneakers, designed by Kanye West and signed by the artist onstage at the Nassau Coliseum in February.

“I know I could buy a house with this kind of money,” said the vendor, Jonathan Rodriguez, 18, of Deer Park, N.Y.

“But I’m a huge Kanye West fan. I can just work to get the money,” he said. “The only way I’m selling them is if there is a reason that I need to sell or I’m offered life-changing money.”

Copyright 2015 The Blade. All rights reserved. This material may not be copied or distributed without permission.